An interesting article found in the Personal Finance section of the Monday, February 15, 2016 issue of the Honolulu Star-Advertiser discussing the feminine style of investing, and how it actually leads to more successful investing in the long run. Read the article below:
Wall Street has a rather masculine image, but don’t assume that men are better than women when it comes to investing. Plenty of studies suggest otherwise, and all of us might improve our investing by paying attention to the factors likely leading to women’s success.
Consider the most successful investor of our time, Warren Buffett. As LouAnn Lofton writes in her book, “Warren Buffett Invests Like a Girl: And Why You Should, Too” (Harper Business, $15), Buffett has credited temperament as more important than intellect when it comes to investing success. And his temperament tends to be more feminine than masculine: He’s patient and does thorough research. He doesn’t buy into the latest popular technology company that he doesn’t understand. He doesn’t take excessive risks or jump in and out of stocks. Indeed, he would like to never sell his holdings. He doesn’t do something just to do something.
So how do women invest? Well, more risk-averse and often less confident than men, they tend to spend more time researching their investment choices. This prevents them from chasing “hot” tips and trading on whims — behavior that tends to weaken men’s portfolios. Women are also more likely to seek out information that challenges their assumptions, rather than relying only on data that confirm what they already thought. They tend to save greater portions of their incomes, as well — despite earning less than men.
One study found that men trade 45 percent more often than women do. By trading less, women produce better returns and also save on transaction costs and capital gains taxes. Women even excel as professional investors, with hedge funds managed by women gaining 59 percent between 2007 and mid-2015, versus an overall 37 percent for hedge funds.
Online investment firm SigFig studied the many portfolios in its system owned by men and women, and found that women outperformed men by 12 percent in 2014 and that men were 25 percent more likely to lose money in the market.